Rayovac 2014 Annual Report Download - page 22

Miracle-Gro, and Tomcat brand names; Central Garden & Pet, which markets garden products under the
AMDRO and Sevin brand names; and Bayer A.G., which markets home and garden products under the Bayer
Advanced brand name.
Products we sell in the household insect control product category face competition from S.C. Johnson &
Son, Inc. (“S.C. Johnson”), which markets insecticide and repellent products under the Raid and OFF! brands;
Scotts Company, which markets household insect control products under the Ortho brand; and Henkel KGaA,
which markets insect control products under the Combat brand.
Our primary competitors in the electric shaving and grooming product category are Norelco, a division of
Koninklijke Philips Electronics NV (“Philips”), which sells and markets rotary shavers, and Braun, a division of
Procter & Gamble, which sells and markets foil shavers. Through our Remington brand, we sell both foil and
rotary shavers.
Primary competitive brands in the small appliance category include Hamilton Beach, Proctor Silex,
Sunbeam, Mr. Coffee, Oster, General Electric, Rowenta, DeLonghi, Kitchen Aid, Cuisinart, Krups, Braun, Rival,
Europro, Kenwood, Philips, Morphy Richards, Breville and Tefal. The key competitors of Russell Hobbs in this
market in the U.S. and Canada include Jarden Corporation, DeLonghi America, Euro-Pro Operating LLC, Metro
Thebe, Inc., d/b/a HWI Breville, NACCO Industries, Inc. (Hamilton Beach) and SEB S.A. In addition, Russell
Hobbs competes with retailers who use their own private label brands for household appliances (for example,
Wal-Mart).
Our major competitors in the electric personal care product category are Conair Corporation, Wahl Clipper
Corporation and Helen of Troy Limited (“Helen of Troy”).
Some of our major competitors have greater resources and greater overall market share than we do. They
have committed significant resources to protect their market shares or to capture market share from us and may
continue to do so in the future. In some key product lines, our competitors may have lower production costs and
higher profit margins than we do, which may enable them to compete more aggressively in advertising and in
offering retail discounts and other promotional incentives to retailers, distributors, wholesalers and, ultimately,
consumers.
Seasonality
On a consolidated basis our financial results are approximately equally weighted between quarters, however,
sales of certain product categories tend to be seasonal. Sales in the consumer battery, electric shaving and
grooming and electric personal care product categories, particularly in North America, tend to be concentrated in
the December holiday season (Spectrum’s first fiscal quarter). Demand for hardware and home improvement
products increases during the spring and summer construction period (Spectrum’s third and fourth fiscal
quarters). Demand for pet supplies products remains fairly constant throughout the year. Demand for home and
garden control products typically peaks during the first six months of the calendar year (Spectrum’s second and
third fiscal quarters). Small Appliances peaks from July through December primarily due to the increased
demand by customers in the late summer for “back-to-school” sales and in the fall for the holiday season. For a
more detailed discussion of the seasonality of our product sales, see Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations—“Seasonal Product Sales.”
Governmental Regulations and Environmental Matters
Due to the nature of our operations, our facilities are subject to a broad range of federal, state, local and
foreign legal and regulatory provisions relating to the environment, including those regulating the discharge of
materials into the environment, the handling and disposal of solid and hazardous substances and wastes and the
remediation of contamination associated with the releases of hazardous substances at our facilities. We believe
that compliance with the federal, state, local and foreign laws and regulations to which we are subject will not
have a material effect upon our capital expenditures, financial condition, earnings or competitive position.
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